According to Bloomberg reports, bankrupt crypto lender Celsius may soon restructure and issue crypto tokens to compensate its users. January 24th.
At a court hearing, Celsius attorney Ross M. Kwasteniet said the company could be reorganized into a properly licensed public company. This approach could serve as an alternative to selling the company’s crypto assets and could be more profitable for creditors given the current poor crypto market conditions.
Celsius is also working to issue new cryptocurrency tokens to compensate the company’s creditors, Kwasteniet said.
Some creditors have reportedly asked Celsius to follow Bitfinex’s lead in issuing the UNUS SED LEO token in 2019 after losing access to some of its funds. Promised a token buyback to compensate.
Coinflex, which went bankrupt shortly after the collapse of Celsius itself, issued recovery tokens (rvUSD) as well last summer. Its token was tied to the value of the US dollar and offered a 20% annual return to users willing to hold onto their assets.
Federal judge approval is required for Celsius to issue tokens. Moreover, any restructuring plan will face creditor votes.
A more detailed report from CoinDesk suggests that Celsius’ will name its new token the Asset Share Token (AST). Tokens will be issued to high value creditors. These creditors can either sell the tokens for an immediate profit or hold the tokens and receive interest. The remaining smaller investors in Celsius make up about two-thirds of the base and receive partial rewards in standard cryptocurrencies instead.
Celsius’ original token, CEL, is still in circulation, but since the company has taken it out of service, it cannot be used as a reward token as intended. CEL has lost 77% in value over the past year. Bitcoin, by contrast, has fallen only 37% in his one-year period.
